Jul 06, 2012—AL-KO, a German producer of industrial air conditioners for airport hangars and other spaces, is employing a radio frequency identification solution to plan its production more precisely, by tracking the movements of parts between two production sites located 550 kilometers (342 miles) apart.

Since most of the air conditioners that the company makes are customized for particular buyers, each model must be configured differently. This requires that different parts be grouped together for each order at a single location, and then be shipped to the company's final production site.

At AL-KO's Jettingen-Scheppach plant, a forklift driver passes through an RFID gate while transporting air-conditioner parts to the truck-loading area.

Parts, such as housings for the air-conditioning systems, are produced in the city of Lutherstadt Wittenberg, not far from Berlin. Final production of the air conditioners occurs in southern Germany, in the town of Jettingen-Scheppach. If a part is unavailable during production in Jettingen-Scheppach, the resultant delays can be costly to AL-KO, says Alexander Lins, an industrial engineer and AL-KO's head of warehouse logistics in Jettingen-Scheppach.

Before the RFID system was deployed, production managers were often unsure of which specific parts they had on hand at any given time. "Colleagues in Wittenberg send the parts we order to Jettingen-Scheppach on a daily basis," Lins explains, "but sometimes, we weren't clear about which parts arrived overnight."

That, Lins says, is why AL-KO's director decided to test an RFID solution to track parts moving between the two sites, and to provide a real-time overview of the production status in the company's existing SAP system.